SI is out 80% of the day,
9:08 AM
8/2/2020
wsj.com
In the race for a Covid-19 vaccine, the University of Oxford stands out. The 900-year-old school’s Jenner Institute is competing against a number of large, publicly traded pharmaceutical companies whose investors could gain handsomely from an effective jab.
Even at Oxford, though, layers of private investors are poised behind the scenes to profit if the vaccine works. They include the university itself, two of the scientists at the center of the program’s research and a little-known investment firm started last year by a former Deutsche Bank AG DB equities trader.
The U.K. government has invested £5 million ($6.5 million) into one company, Vaccitech Ltd., whose technology is central to the vaccine, according to people familiar with the investment. Several Chinese investors, including an investment arm of Huawei Technologies Co., have small stakes in a firm that ranks as Vaccitech’s biggest investor.
The complex web of investors illustrates the little-known financial interests often at play in the development of scientific innovation—even at institutions like Oxford that seem far removed from mainstream corporate and investing worlds.
Early last century, Oxford academics coaxed the first vats of penicillin for human use from laboratory tubs and bedpans, revolutionizing the treatment of bacterial infections. Today, the Covid-19 vaccine project at Oxford is among a handful of promising efforts. It is competing against similarly advanced vaccine trials by pharmaceutical companies like Pfizer Inc. and Moderna Inc., as well as state- and military-backed efforts in China and Russia.
Oxford in April chose U.K. drugmaker AstraZeneca AZN PLC to lead in making and distributing its vaccine, should it ultimately be approved for use. Shares of AstraZeneca have risen 12% this year, as investors weigh whether the vaccine effort could be a moneymaker. Reporting earnings Thursday, AstraZeneca’s chief executive told Bloomberg TV he expects to make a “reasonable profit” in wealthier countries from the vaccine after the worst of the crisis is over.
AstraZeneca shareholders aren’t the only ones who could prosper if the Oxford vaccine works.
Adrian Hill, co-founder of Vaccitech, is one of the Oxford scientists leading the vaccine program.
PHOTO: JOHN CAIRNS/OXFORD UNIVERSITY/ASSOCIATED PRESS
Vaccitech, a privately held company co-founded by Sarah Gilbert and Adrian Hill, two Oxford scientists leading the vaccine program, owns intellectual property crucial to the vaccine’s development. The two together now own roughly 10% of the company, according to a March public filing.
Dr. Gilbert said she’s focused on the Covid-19 vaccine and funding required for its development.
Dr. Hill didn’t return requests for comment.
Vaccitech Chief Executive Bill Enright said the company would benefit from a big chunk of the royalties from a successful vaccine as well as “milestone” payments, but only after the pandemic is declared over, according to the terms of its royalty agreement with Oxford. Milestones are negotiated fees based on hurdles achieved, typically including regulatory approval. Further details related to the Oxford deal aren’t public.
A key part of Vaccitech’s technology uses a doctored form of a cold virus from a chimpanzee to boost the human immune system, rousing antibodies and disease-fighting white blood cells to ward off infection. Its use in a high-profile vaccine like the one for Covid-19 could help validate and support Vaccitech’s technology for other applications, focused on human papillomavirus, hepatitis B and prostate cancer.
Vaccitech, a privately held company co-founded by Sarah Gilbert and Adrian Hill, two Oxford scientists leading the vaccine program, owns intellectual property crucial to the vaccine’s development. The two together now own roughly 10% of the company, according to a March public filing.
Dr. Gilbert said she’s focused on the Covid-19 vaccine and funding required for its development.
Dr. Hill didn’t return requests for comment.
Vaccitech Chief Executive Bill Enright said the company would benefit from a big chunk of the royalties from a successful vaccine as well as “milestone” payments, but only after the pandemic is declared over, according to the terms of its royalty agreement with Oxford. Milestones are negotiated fees based on hurdles achieved, typically including regulatory approval. Further details related to the Oxford deal aren’t public.
The company, which has 38 employees, was valued last year at about $86 million after its most recent primary funding round, according to company officials. Other investors include Alphabet Inc.’s GV, formerly called Google Ventures, and Sequoia Capital China, an affiliate of the Silicon Valley venture-capital giant. The U.K. government, via its Covid-19-focused Future Fund, invested £5 million in recent weeks through a convertible note, essentially a loan that can convert to equity, according to people familiar with the matter.
Amid its involvement in the Oxford vaccine, Vaccitech is talking to investors in the hopes of raising another $55 million, Mr. Enright and other company officials said. It is also considering an initial public offering as early as next year, they said.
Vaccitech is now one of the most valuable companies in the portfolio of the university-affiliated Oxford Sciences Innovation PLC. OSI is a venture firm the university launched in 2015 to fund startups spun out from its various research areas, from immunology to quantum computing.
The firm was designed to help Oxford catch up with other prestigious institutions, like the Massachusetts Institute of Technology and Stanford University, turning valuable research into commercial ventures. OSI takes stakes in promising companies founded by faculty or started in the school’s labs, seeking to support them while drawing in other outside investors as the startups grow. |
